Local News

Wiggins voters to decide on use, sales taxes

Town trustees have emphasized that ordinances will not cost residents anything

By Robert Leininger

Times Editor

Posted:
10/18/2017 06:38:11 PM MDT

A ranch style home under construction at Wiggins' new Kiowa Park subdivision. Wiggins voters are being asked to approve a tax that would redirect sales tax revenue collected on materials purchased outside of Wiggins for use within it to the town. (Jon A. Yamamoto / Fort Morgan Times)

With ballots already in the mail, now is the time for Morgan County voters to make sure they understand everything they are voting on.

In Wiggins, residents are being asked to approve two new taxes that town leaders say will allow the town to generate additional tax revenue without adding to resident's current tax burden.

The first of those taxes is a construction materials use tax that would redirect existing sales tax charged on the sale of building materials and supplies purchased outside of Wiggins for use on projects in Wigigns to the town.

The sales tax on those items that would be paid to Wiggins would be two percent, Wiggins' sales tax rate, and would replace the sales tax typically paid to the municipality where the items are purchased. However, municipalities that charge sales tax in excess of two percent would still be able to collect the difference.

"It just gives the money to Wiggins where the building materials are used," City Manager Paul Larino said in June.

Larino said that builders would pay tax representing the tax they would anticipate owing based on the materials they expected to use.

Builders would then receive a receipt that they could present to retailers in other cities providing that they had paid a use tax and did not need to pay the first three percent in city sales tax. The city and contractor will then go through a process of determining if additional money is owed or needs to be paid back from the city at the end of the project based on the cost of the actual items used.

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"I can't emphasize enough this is money that anybody who builds is already spending," Larino said of the tax in July. "We are letting these taxes go to another town and they should be coming to Wiggins where the products are being used."

In September, Larino told the trustees that he had been hearing residents were claiming that the use tax was going to be charged on motor vehicles and machinery that people purchase outside of Wiggins. He clarified that such statements were not correct.

"I want to be clear that the ballot language we have is for building materials only," he said. "Colorado law does allow use taxes to be collected for those things if a community elects to do so but TABOR (the state's Taxpayer's Bill of Rights) requires that to be in the ballot language (and it is not in our's)."

Use tax revenue would likely be significant in coming years as the town is continuing to grow and expand with new housing developments.

A similar use tax measure appeared on last year's ballot and was voted down 240 to 167.

Wiggins is also voting on an ordinance that would impose a $5 per might tax on hotel room stays in Wiggins. Wiggins does not currently have any hotels but Larino said that the town is having active conversations with several hotel companies about building one in the town. Larino said that he thinks a hotel will probably be open in Wiggins by late 2018 or early 2019.

The use tax revenue will be used to market the hotel and general tourism to Wiggins.

"As you know we have what is, I believe, the number one tourist attraction in the county, in Jackson Lake,"Larino said at a July trustee's meeting. "We pull people all the way from Boulder and Denver and Greeley to utilize the lake so the hotel will do very well and we can market it (using that revenue)."

Statutory communities such as Wiggins are not legally allowed to charge a percentage tax on hotel rooms stays as self-rule communities and counties can which is why the town is charging the flat $5 per night tax.

Larino said in July that he feels the tax is very reasonable compared to those charged in other cities. He said communities charging a percentage tax often tax stays at 3 to 10 percent with larger cities generally charging 10 percent, which comes out to $10 in tax on a $100 room. He said smaller municipalities typically charge in the $3 to $4 a night range with some in the $5 range, placing Wiggins on the high end.

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